With sunset in Male, it's darkening elsewhere too

With GMR Infrastructure forced to give up on its $511-million Male airport, the latter has become the second major global project for the Bangalore-based company to be lost. In late November 2010 two years ago, GMR Infra had sold its 50-per cent stake in US-based power generation company InterGen for $900 million, saying it intended to focus on opportunities in India.

GMR Infra had held InterGen asset for two years after acquiring a 50 per cent stake for $1.2 billion mid-2008. However, while selling this to Huaneng Group, a Chinese major, GMR retained a 800-Mw gas-fired power project in Singapore, expected to be commissioned late 2013. GMR has already offloaded 30 per cent in this $800-million project to Malaysian oil & gas conglomerate Petronas, which is being executed in a 57:43 debt to equity ratio.

With the exit of InterGen and the airport project in Maldives, GMR Infra is left with an airport project in Turkey, two coal mines in Indonesia and one coal mine in South Africa as part of its global portfolio, besides two hydro-projects in Nepal due to be commissioned by 2016.

The performance of Turkey airport is far from convincing for GMR, as during last fiscal it bled as much as Rs 104 crore on a topline of around Rs 680 crore. Continuing the losses at this airport, during the first half of this fiscal, the project had a loss of Rs 45 crore on a topline of Rs 400 crore. GMR Infrastructure owns 40 per cent in this airport, while the rest is held by Malaysian Airports and Limak Holdings of Turkey. GMR has invested 40 per cent of its Euro 100 million equity in this Euro 450 million project which involves building a new terminal as well as upgrading the existing terminal with a capacity of 20 million passengers per annum.

However, there is hope in GMR that with the second airport in Turkey already running at full capacity and further additions of traffic is expected to be channelled into the airport being managed by GMR. “Turkish Airlines has announced to progressively base five more aircraft at our airport starting from summer 2013. This development will add atleast 0.4 million international passengers in the year 2013,” a senior official of GMR Infrastructure told Business Standard. Fuel revenues also play a major role in bringing 65 per cent of the total revenues of Rs 680 crore at this airport.

Out of the three coal mines GMR has global, the South African mines (Homeland Energy) in which GMR has around 55 per cent, lost Rs 110 crore on revenues of Rs 141 crore for last fiscal. One of the primary reasons for this losses is that GMR is not able to export much of the proceeds from these mines as the port infrastructure is weak and the same is being refurbished.

Of the two Indonesian coal mines under its portfolio, GMR owns 100 per cent in Barasentosa Lestari PT, which it acquired for $80 million during early 2009 and which has reserves of 100 million tonnes of coal. GMR is yet to start selling coal from this project and the same is expected by end of this fiscal. GMR had raised a debt of $40 million to pay the first tranche of this acquisition with rest expected to be paid out shortly. Post this acquisition, GMR during mid 2011, went ahead and made a big acquisition of by paying out $500 million to acquire a 30 per cent stake in Golden Energy Mines which has coal reserves of 860 million tonnes. GMR in this operations, on a part fiscal basis, lost close to 43 crore on a topline of Rs 58 crore, primarily due to the interest payout on the $470 million debt it has taken to acquire this asset.